On Petition for Review of an Order of the Federal Labor Relations Authority

Kevin M. Grile argued the cause for petitioner, with whom Mark D.
Roth and Charles A. Hobbie were on the briefs.

David M. Smith, Solicitor, Federal Labor Relations Authority, argued
the cause for respondent, with whom WilliamR. Tobey, Deputy
Solicitor, and James F. Blandford, Attorney, were on the brief.

Mark W. Pennak, Attorney, United States Department of Justice, argued
the cause for intervenor, with whom FrankW. Hunger, Assistant
Attorney General, and William Kanter, Deputy Director, were on the brief.

H. Stephan Gordon was on the brief for amicus curiae National
Federation of Federal Employees.

Before: SILBERMAN, SENTELLE and RANDOLPH, CircuitJudges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge: This is a petition for review of a Federal
Labor Relations Authority ("FLRA" or "Authority") decision
that a bargaining proposal from Local 32 of the American Federation of
Government Employees ("Union") is outside the Office of Personnel
Management's ("OPM" or "Agency") duty to negotiate. The
Authority found the proposal non-negotiable because it directly implicates and
purports to regulate the working conditions of supervisors.

Agreeing with the Authority, we deny the petition.

BACKGROUND

Where a union is the exclusive representative of employees
of a federal agency, the Federal Service Labor-Management Relations Statute
("Statute" or "FSLMRS") imposes upon the agency a general
obligation to negotiate in good faith over the conditions of employment of the
represented employees. 5 U.S.C. §§ 7114, 7117; U.S. Merit Sys. Protection
Bd. v.FLRA, 913 F.2d 976, 977 (D.C. Cir. 1990). The scope of the
agency's obligation to bargain, however, is limited. The agency need not
negotiate, inter alia, over a proposal that "seek[s] to regulate the
conditions of employment of members of other bargaining units and supervisory
personnel." United States Dep't of the Navy, Naval Aviation Depot,
Cherry Point, North Carolina v. FLRA, 952 F.2d 1434, 1443 (D.C. Cir. 1992)
[hereinafter Cherry Point]. This case requires us to apply the quoted
language from Cherry Point.

The Union is the exclusive representative of a unit of
employees of the OPM working at its central office in Washington, D.C. On May 2,
1995, OPM informed the Union that it intended to revise its policies regarding
reductions in force ("RIF"). Among other things, the Agency proposed
to modify the "competitive areas" that would be used by the Agency in
the event of a RIF.

The concept of a "competitive area" is an
important one in the field of federal labor relations. As we have previously
explained, a competitive area is simply a grouping of employees within an
agency, according to their geographical or organizational location, who compete
for job retention when a particular position is abolished or some other adverse
action constituting a RIF is imposed. In such circumstances, an employee holding
the affected position may be able to prevail over less senior or less qualified
employees who hold different positions but are within the same competitive area.
American Fed'n of Gov't Employees, Local 32, AFL-CIO v.FLRA, 853
F.2d 986, 988 (D.C. Cir. 1988) (footnotes omitted) [hereinafter AFGE II].
How an agency's competitive areas are defined affects which employees will
retain their jobs in the event of a RIF.

The definition of the Agency's competitive areas is
obviously an issue of great concern to the Union. Given this, theUnion responded
to the Agency's proposed changes by advancing its own proposal. The Union's
proposal called for the Washington office to be divided into fewer competitive
areas than did the Agency's proposal. The Union's proposal favored more senior
and more qualified employees. The greater the number of other employees within a
competitive area the more likely it will be that these employees will find
juniors to displace in the event of a RIF.

A week after receiving the Union's proposal, the Agency
asserted that its duty to bargain under the Statute did not extend to the
Union's competitive bargaining proposal. The Union appealed that decision to the
Authority. See 5 U.S.C. 7117(c). The Agency argued to the Authority that
the Union's proposal was non-negotiable because, if accepted, it would determine
the competitive areas for supervisory and managerial personnel.

Under OPM regulations, "[a] competitive area must be
defined solely in terms of an agency's organizational unit(s) and geographical
location, and it must include all employeeswithin the competitive
area so defined." 5 C.F.R. § 351.402(b) (emphasis added); see also
U.S. Merit Sys.Protection Bd., 913 F.2d at 980 (defining "the
competitive area to include only bargaining unit employees ... is clearly
prohibited under OPM regulations"). A union, however, has no right to
negotiate over the working conditions of supervisors. A union has the right to
negotiate only for employees who are members of its bargaining unit. See
5 U.S.C. § 7114(a)(1). Supervisors may not belong to any bargaining unit. 5
U.S.C. § 7112(b)(1). An agency therefore has no obligation to negotiate over
any proposal that directly implicates the working conditions of supervisors.
Allowing the Union to force the Agency to negotiate over this proposal would
violate the basic principle of labor law that a union represents employees who
are members of its bargaining unit, and those employees only. Cherry Point,
952 F.2d at 1442. The Agency relied on the Authority's opinion in International
Fed'n of Prof'l and Technical Eng'rs and U.S. Dep'tof the Navy Marine
Corps Sec. Force Battalion Pac., 47 F.L.R.A. 1086 (1993) [hereinafter IFPTE].
Because the Union's proposal necessarily defined the competitive area for
supervisory personnel, it was outside the Agency's duty to negotiate.

The Union countered by arguing that its proposal was
negotiable because "it is not AFGE 32's intention to determine the
competitive area for [supervisory] personnel." The proposal affected
supervisory personnel only because OPM regulations required that competitive
areas include all employees within the area. The Union relied on the Authority's
decision in National Weather Service Employees Org. andU.S. Dep't of
Commerce Nat'l Oceanic and AtmosphericAdmin., Nat'l Weather Serv.,
Silver Spring, Maryland, 44 F.L.R.A. 18 (1992), enforced sub nom.
Department of Commerce v. FLRA, 7 F.3d 243 (D.C. Cir. 1993) [hereinafter National
Weather Service]. In National Weather Service, the Authority held a
competitive area bargaining proposal to be negotiable despite the effect it
would have on management personnel. The Authority focused in that case on the
union's intent. Because the union did not intend to regulate the conditions of
employment of management personnel, the proposal was negotiable. 44 F.L.R.A. at
28. The Union argued that National Weather Service required the Authority
to hold that its proposal was negotiable.

The Authority agreed with the Agency. After a careful
analysis of relevant authority and D.C. Circuit precedent, the Authority stated
that there was no basis, either in the Statute or in precedent, for the
"proposition that, in determining whether a proposal [is negotiable], it is
appropriate to rely on what the union seeks to accomplish rather than what the
proposal would, in fact, accomplish." 51 F.L.R.A. 491, 1995 WL 649037, at
*10 (1995). Rather, the exact opposite was true. Negotiability was determined
based on a proposal's actual, not its intended, effect. The Authority disavowed
the contrary position it had taken in National Weather Service.
Once this was established, the application to the facts in this case was easy.
The Union's proposal, if adopted, would determine the competitive areas for
supervisors. An agency has no obligation to negotiate over proposals that
directly implicate supervisory personnel. See, e.g., Cherry Point, 952
F.2d at 1442. The Union's proposal was therefore outside the duty to bargain.

The Authority recognized that this decision placed the
Union in a " ‘catch-22' situation." 51 F.L.R.A. 491, 1995 WL 649037,
at *10. OPM regulations require that competitive areas be defined to include
supervisors, yet agencies have no duty to negotiate over proposals that affect
supervisors. The Union might thus never be able to negotiate over this important
condition of employment. The Authority nevertheless dismissed the petition for
review. This appeal followed.

ANALYSIS

This is not a new issue for this court. This is at least
the fourth time that these two parties have clashed over the negotiability of
union competitive area proposals. In Local32, Am. Fed'n of Gov't
Employees, AFL-CIO v. FLRA, 774 F.2d 498 (D.C. Cir. 1985) [hereinafter AFGE
I], the Authority below had held that a union proposal was outside an
agency's duty to negotiate because it would affect non-bargaining unit
employees. In a different case presenting similar facts, however, the Authority
had held that a proposal defining competitive areas was within an agency's duty
to negotiate. This court noted the discrepancy between these holdings and
remanded the case to the Authority to reconcile the apparent inconsistency. Id.
at 499-500.

On remand the Authority announced again that the union's
competitive area proposals did not fall within the Agency's duty to negotiate.
It arrived at this conclusion by balancing "the right of the union to
negotiate over the conditions of employment of bargaining unit employees and the
right of the agency to set the conditions of employment of nonbargaining unit
employees." American Fed'n of Gov't Employees, Local32, AFL-CIO
and Office of Personnel Management, 22 F.L.R.A. 478, 482 (1986).

The union contested the Authority's conclusions and its
analysis in an appeal to this court. We again agreed with the union and remanded
the case to the Authority. In doing so we concluded that the Authority's use of
a balancing test was inconsistent with the statute. AFGE II, 853 F.2d at
991. We reminded the Authority of the analogous relationship between the FSLMRS
and the National Labor Relations Act and urged it to consider using the private
sector's "vitally affects" test in its further consideration of this
question. Id. at 992; see Allied Chem. & Alkali Workers, Local
Union No. 1 v.Pittsburgh Plate Glass Co., 404 U.S. 157, 179 (1971).
The "vitally affects" test has been used in the private sector to
expand "the scope of mandatory bargaining subjects to include issues
directly relating to non-employees or other conditions [outside the bargaining
unit], so long as a sufficient nexus with the employees' interests can be
shown." CherryPoint, 952 F.2d at 1440 (quoting CHARLES J.
MORRIS, THE DEVELOPING LABOR LAW 765 (2d ed. 1983)) (alteration in original).

Accepting our suggestion, the Authority began to use the
"vitally affects" test to determine the negotiability of union
proposals. Applying that test to the proposals involved in AFGE I and AFGE
II, the Authority found that the proposals were negotiable because they
"vitally affect[ed]" the working conditions of employees in the
bargaining unit. American Fed'n of Gov't Employees, Local 32, AFL-CIO and
Officeof Personnel Management, 33 F.L.R.A. 335, 338-39 (1988). The
OPM appealed the decision to this court, challenging both the result and the
Authority's use of the "vitally affects" test. We denied its petition.
1 We did not, however, consider whether the "vitally
affects" test had been appropriately applied. We held that the law of the
case doctrine and justiciability concerns barred us from considering the
challenge. United States Office of Personnel Management v.FLRA,
905 F.2d 430, 433-35 (D.C. Cir. 1990) [hereinafter AFGE III].

The Authority therefore went on resolving negotiability
disputes by asking whether the proposal "vitally affected" the working
conditions of employees in the relevant bargaining unit. See, e.g., American
Fed'n of Gov't Employees, Councilof Marine Corps Locals and Dep't of the
Navy, U.S. MarineCorps, 35 F.L.R.A. 1023, 1030-33 (1990). The
appropriateness of this practice went unreviewed until this court considered the
question in Cherry Point.

In Cherry Point, the Authority applied the
"vitally affects" test to proposals concerning promotion practices and
parking policy at a military base. The Authority found the proposals to be
negotiable and the Navy brought a petition challenging the Authority's
"adoption, construction and application" of the "vitally
affects" test. Cherry Point, 952 F.2d at 1436. We approved the
Authority's decision to adopt the "vitally affects" test, but held
that the Authority's construction and application of the test were flawed. Id.
at 1439. Contrary to the Authority's practice, the "vitally affects"
test is applicable only when the subject of the proposal is outside the scope of
mandatory bargaining. Id. at 1440.

In addition, and of greater relevance for this case, we
also held that the vitally affects test is not applicable if a union proposal
"directly implicate[s]," "purports to regulate," or "seek[s]
to regulate" the working conditions of supervisory personnel or members of
other bargaining units. Id. at 1441-43. Such proposals are always
non-negotiable. The present case requires us to expound on this aspect of Cherry
Point.

In order to determine the negotiability of the union's
proposal, we must first ascertain whether it "directly implicates,"
"purports to regulate," or "seeks to regulate" the working
conditions of supervisors. If it does, the proposal is outside the Agency's duty
to negotiate.

We note at the outset that the Authority has not been
consistent in its application of Cherry Point. In NationalWeather
Service, the Authority focused on the union's intent in determining whether
the proposal "purported" to regulate the working conditions of
supervisory personnel. If the effect on supervisors was a result of the
operation of a federal regulation rather than the result of the union's intent,
the Agency could not claim that the proposal "purported" to regulate
the working conditions of supervisors and was for that reason outside the duty
to negotiate. In IFPTE and in its opinion in this case, however, the
Authority relied not on the union's expressed intent, but rather on the effect
that the proposal would have on the working conditions of supervisory personnel.

We are not suggesting, however, that the Authority has
been arbitrary or capricious. Rather, as we noted above, the Authority expressly
rejected its National Weather Service reasoning in its decision in this
case. See p. 5, supra (citing 51 F.L.R.A. 491, 1995 WL 649037, at
*10 (1995)). The Union argues to us now that the Authority's approach in NationalWeather Service is correct. It reads our use of the terms
"purport" and "seek" in Cherry Point to require the
Authority to determine the negotiability of a proposal by looking to the intent
of the union as it is expressed in the language of the proposal itself. In the
Union's view, its proposal does not say anything about the working conditions of
supervisory personnel, and therefore cannot be said to "purport" or
"seek" to regulate their working conditions or "directly
implicate" them. The Union contends that its proposal is therefore
negotiable so long as it "vitally affects" the working conditions of
members of its bargaining unit. Due to the central importance of the RIF
process, the Union maintains that its competitive area proposal clearly meets
that standard and is within the Agency's duty to negotiate.

The Authority disagrees. It rejects as contrary to
statute, common sense, and Cherry Point the Union's "myopic"
focus on the language of the proposal. It interprets Cherry Point to mean
that a union proposal that "preclusively determines" or "mandate[s]"
working conditions for supervisory personnel is outside the scope of the
agency's duty to negotiate. In this case the union proposed a redefinition of
OPM's competitive areas. OPM regulations require that competitive areas be
defined so as to include all employees within the area. 5 C.F.R. § 351.402(b).
Supervisors work within the competitive area that the union proposes to define.
Therefore, the Authority contends that the union's proposal "purports"
to regulate the working conditions of supervisors and is outside the Agency's
duty to negotiate.

The Authority is correct. All the Union has to offer in
support of its position is a strained interpretation of the Cherry Point
court's use of the word "purports." Its interpretation is easily
rejected. Its most obvious flaw is that it is completely counter to the approach
we took in Cherry Point itself. In Cherry Point we focused, not on
the language that the union used in crafting its proposal, but on the effect
that the union proposal would have if the agency accepted it. We held that the
proposals in question in Cherry Point were nonnegotiable. We did not base
our holdings on the fact that the union proposals, if accepted, would have some
effect on the working conditions of supervisors or members of other
bargaining units. Nearly every bargaining proposal, if accepted, will have some
effect on non-unit personnel. We found that the union's proposals were
non-negotiable because, if accepted, they would govern the working
conditions of supervisors and employees in other bargaining units. This is the
distinction that we were drawing through our use of terms such as "directly
implicate," "seek to regulate," and "purport to
regulate."

An analysis of the two parking proposals mentioned in the
opinion makes this point clear. The first proposal is the one the union
submitted. The union's proposal called "for the establishment of an
"open' parking policy for all employees and supervisory personnel
working at the Cherry Point installation." Cherry Point, 952 F.2d at
1436. We held that this proposal was outside the agency's duty to negotiate. The
second parking proposal, a hypothetical mentioned at oral argument and discussed
in the opinion, called for "all parking at Cherry Point [to] be reserved
for employees in the Local 2297 unit." Id. at 1441. We said that
this proposal was negotiable.

The significant difference between these proposals is not
that the first mentions the interests of the supervisors and the second does not
or that the first impacts non-unit personnel and the second does not. The
crucial difference is that the first would have bound the agency vis-a-vis the
parking rights of members of other bargaining units and supervisors, and the
second would not have. Had the agency accepted the second proposal, it would
have had severely limited options regarding the parking privileges of these
other employees and supervisors (and that is why the proposal would likely have
been unreasonable, despite being negotiable) but it still could have worked with
these other groups to arrive at some other arrangement. The first proposal, by
contrast, would have defined parking privileges not just for members of the
union's bargaining unit, but also for members of other bargaining units and
supervisory personnel. Because this would be counter to basic principles of
labor law, we held that the union's parking proposal was non-negotiable.

Applying this principle to the facts of this case, it is
clear that the Union's competitive area proposal is not within the agency's duty
to negotiate. 5 C.F.R. § 351.402(b) and U.S.Merit Sys. Protection
Bd. require that a competitive area be defined to include all workers in an
area. The Union's proposal, if implemented, would therefore govern the
competitive area not only for members of the Union's bargaining unit, but also
for supervisory personnel. As the Cherry Point court made clear, such a
proposal is outside an agency's duty to negotiate. The Authority's decision was
therefore correct.

The Union emphasizes repeatedly that it does not intend to define the
competitive area for supervisors. Its proposal has this effect only because of
the necessary operation of 5 C.F.R. § 351.402(b). The Authority noted that this
placed the Union in a difficult position, where it might never be able to force
the Agency to bargain bilaterally over the definition of competitive areas. 51
F.L.R.A. 491, 1995 WL 649037, at *10.

We acknowledge that this ruling puts the Union in a
difficult position. Difficult though that position may be, it seems to be
contemplated by the FSLMRS. Under § 7117(a)(1) the duty to bargain in good
faith does not extend to proposals that are inconsistent with federal law or
government-wide regulations. This statutory provision appears to give the
government the ability to make certain categories of proposals non-negotiable by
adopting government-wide regulations covering those subjects. This is
essentially what the government did here. The FSLMRS gives the Union the right
to negotiate only for employees who are members of its bargaining unit. 5 U.S.C.
§ 7114(a)(1). Supervisors may not belong to any bargaining unit. See 5
U.S.C. § 7112(b)(1). Because of 5 C.F.R. § 351.402(b), however, the Union's
proposal will determine competitive areas for supervisors as well as for members
of the Union's bargaining unit. The Union's proposal therefore exceeds the
negotiating authority that it is given under the FSLMRS. 2
It is inconsistent with federal law and outside the Agency's duty to
negotiate. See AFGE III, 905 F.2d at 436 (Silberman, J., concurring).

CONCLUSION

If adopted, the Union's proposal would govern the working
conditions of supervisors at the OPM. It is therefore outside the Agency's duty
to negotiate. We deny the Union's petition for review.

Footnotes

1 We also denied the petition of the
Nuclear Regulatory Commission, co-petitioner in the case.